TOKENS – What is it and where do they come from?

Few people have not heard about bitcoin – the very mega-promoted crypto currency. And now, imagine that tokens are times less popular tokens, which are also cryptocurrency. Here the difference is almost the same as that of the dollar and the Belarusian ruble, where both examples are currencies, but issued by a different issuer. There will be clever people who will object to this and state that this is not the same, because bitcoin is a crypto currency, whereas a token is a digital asset. Yes, yes, yes, but not quite yes .. Crypto currency is the same and is a digital asset, and statements that bitcoin and token are not the same, in general, will not be entirely true.

Where do tokens come from?

The companies issue tokens to attract investments for their development. The process of releasing tokens is called ICO (Initial Coin Offering or “initial coin offer / initial coin placement”). For a better understanding, consider the following example with the already mentioned bitcoin, which comes in the form of reward to the miners. Those, in turn, use computers to perform complex calculations and generate the crypto currency itself through mathematical protocols. The type of cryptocurrency will depend on the type of protocol used. Now let’s imagine that some company created its own protocol, then translates its technique there and starts generating its own crypto currency – that is, those tokens. Therefore, the blockade and ICO are inextricably linked, since the latter is a chain of computers – an analogy of the blockbuster.

Types of tokens

There is no definite classification of tokens at the moment. But still they can be divided by functions, according to the wishes and needs of the company itself, which produces ICO, namely:

– Tokens “tokens” – are the usual speculative currency. The investor buys these tokens with the prospect of earning on the growth of their prices. When the price increases the investor rushes to sell the purchased tokens more expensively and collect the maximum benefit. – Tokens “shares” – often analogue to traditional shares. Here the company issuer gives the opportunity to their owners to receive income in the form of dividends. In addition, as in the case of stocks, the owner of these tokens can also influence the management decisions of the company itself. – Tokens “bonds” – they are very similar to the previous ones, but with a small difference. The company that issues such tokens, takes the amounts from their sales as loans. That is, the issuer undertakes to pay interest income on the value of issued tokens to their owners.

However, the US Securities and Exchange Commission (SEC) and the Swiss Financial Market Supervision Service (FINMA) are trying to classify the tokens, which are divided into the following groups:

– “Security tokens according to the SEC” / “Asset tokens according to FINMA” – they give the right to receive basic assets, dividends and interest payments. That is, with economic functionality similar to shares, bonds or derivatives. – “Service tokens” (Utility tokens according to the SEC and FINMA) – provide access to goods and / or services that the issuer company plans to launch in the future under the project. Moreover, owners of service tokens may also be eligible for a discount / premium access to these products and / or project services. – “Real Cryptocurrencies according to the SEC” or “payment tokens” (Payment tokens according to FINMA) – are often considered as a means of settlement – a currency instrument and have their own block. Often they are not associated with any other projects and do not have any other functions. By and large, this cryptocurrency should become an analogy to money and gold. It should give its owner the right to buy and sell, as well as perform other financial transactions, which in a similar way gives a cryptocurrency.

Where to get the tokens?

In most cases, companies that simulate their own tokens place their respective purses on their own websites. Everyone can send crypto currency and in this way to get tokens. Also you can find sites with ICO calendars about sales of tokens – for example here: tokenmarket.net/ico-calendar wiserico.com/ www.icoalert.com/ www.investing.com/crypto/ico-calendar and many others). More tokens can be easily and quickly purchased at crypto-exchange exchanges, for example, poloniex.com/ exmo.me/ or bittrex.com/, etc. To begin with, you will need to register and make a contribution to the trading account you open, a certain amount of cryptonet. After that you can get the necessary tokens.

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